Barnes & Noble, Inc. (BKS) Spinoff Could Boost Stock Value By 44%

Several analysts believe that the stock value of Barnes & Noble, Inc. (NYSE:BKS) could increase by 44% if the bookseller will spin off its three businesses—retail chain, college bookstore, and NOOK media business, according to report fromBloomberg.

Speculations regarding the possible split up of Barnes & Noble, Inc. (NYSE:BKS) businesses ignited after William Lynch suddenly resigned as CEO and director of the company, effective immediately last week. Micahel Huseby was immediately appointed as president of the company and CEO of NOOK Media.

Barnes & Noble Would Benefit From Splitting Businesses

Based on data compiled by Bloomberg, the average estimate of four analysts indicated that the stock value of Barnes & Noble, Inc. (NYSE:BKS) will become $25.86 if its businesses are separated. The stock price of the bookseller closed at $17.97 a share yesterday.

Steven Sorrano, an analyst at Calvert Investments Inc, said, “They need to do something sooner rather than later. For shareholders, there is a sense of urgency. If they can realize good value from making that right sale, I think that’s better for shareholders.”

Leonard Riggio, chairman and the largest shareholder of the company expressed his interest in acquiring the retail chain of Barnes & Noble, Inc. (NYSE:BKS), which is composed of 675 stores, and related websites.

In a regulatory filing with the Securities and Exchange Commission (SEC) last February, Riggio indicated that the price of the acquisition will be negotiated with the board. The transaction will be paid primarily with cash.

As part of the management change announced July 8, Huseby and Mitchell Klipper, the head of the retail chain, will report directly to Riggio.

S&P’s Souers anticipated that Riggio might partner with Liberty Media Corp (NASDAQ:LMCA) (NASDAQ:LMCB) or other investors to complete the acquisition of the retail chain. Liberty Media acquired a stake in the bookseller in 2011.

Microsoft Might Be Interested In NOOK Media

Some analysts believe that Microsoft Corporation (NASDAQ:MSFT) might be interested in acquiring NOOK Media, which was created as a subsidiary of Barnes & Noble, Inc. (NYSE:BKS) in 2012. Last year, the software giant invested $300 million to acquire a 17.6% stake in NOOK Media.

Other analysts speculated that Google Inc (NASDAQ:GOOG) could be a possible suitor for the NOOK Media while Pearson PLC (NYSE:PSO) might be interested in purchasing the college business unit of Barnes & Noble, Inc. (NYSE:BKS).

Last month, the bookseller decided to exit manufacturing its tablets in an effort to reduce its losses. Barnes & Noble, Inc. (NYSE:BKS) said it will establish a partnership with third party manufacturers.